NEEDHAM, Mass - PTC (Nasdaq: PMTC), The Product Development Company®, today reported results for its fiscal first quarter ended January 3, 2009.
* Q1 Results: Revenue of $240.4 million and non-GAAP EPS of $0.15
o GAAP EPS of $0.04
* Q2 Guidance: Revenue of $220 to $230 million and non-GAAP EPS of $0.04 to $0.10
o GAAP EPS loss of $0.10 to $0.19
o Includes $15 to $20 million restructuring charge to reduce operating expenses
* FY 2009 Targets: Revenue of $960 million with non-GAAP EPS of $0.90
o GAAP EPS of $0.43 to $0.49
o 20% non-GAAP operating margin for H2'09
The Q1 non-GAAP results exclude $10.5 million of stock-based compensation expense, $8.5 million of acquisition-related intangible asset amortization expenses and $6.2 million of related income tax effects. The Q1 results include a non-GAAP tax rate of 19%, a GAAP tax benefit rate of 89% and approximately 117 million diluted shares outstanding.
Computer-Based Training Product Reclassification
Beginning in FY2009, PTC is reclassifying its computer-based training product related sales previously recorded as Services revenue to License and Maintenance revenue to better align with how these training products are sold to customers. This will not affect total revenue, operating margin or net income. However, the reclassification will result in a shift of approximately $20 million of revenue annually from Services to License and Maintenance (primarily License). Revised historical results which reflect this reclassification are included in the Financial and Operating Metrics document available on our website. All results and forward-looking comments provided in this document are in accordance with the reclassified reporting structure.
Q1 Results & Outlook
C. Richard Harrison, president and chief executive officer, commented, "We delivered $240 million of revenue in Q1 compared to $241 million in the year ago period. This performance reflects a $20 million, or 29%, decrease in license revenue compared to Q1'08 inclusive of a $2 million unfavorable currency impact. Our total revenue was up 2% on a constant currency basis, reflecting the growth of our maintenance and services businesses as well as 2 months of additional revenue contribution from CoCreate, which we acquired on November 30, 2007. On an organic constant currency basis, our total revenue was down 3%, or approximately $8 million, compared to last year."
"Our pipeline for new business opportunities remains strong," continued Harrison. "We are, however, experiencing lengthening lead times and reduced spending on large deals and our reseller channel is also being impacted by softening end-market demand. Recognizing that the margin for error is greater than it has historically been due to the uncertainties of the current environment, we are currently expecting FY'09 revenue of approximately $960 million, with Q2 revenue in the range of $220 million to $230 million."
Harrison added, "Our technology is winning in significant competitive benchmarks and we remain very optimistic about the long-term opportunity for PTC. We intend to continue to make strategic investments we believe are critical to gaining market share and improving operating profitability over the longer-term, including improving the breadth and competitiveness of our product portfolio, expanding our reseller channel and developing an ecosystem of strategic services partners."
Neil Moses, chief financial officer, commented, "Balancing the long-term market opportunity with the severity of the global economic situation, we began to take actions in Q1 to reduce our operating expenses, including reducing our rate of hiring, postponing annual merit increases and reducing travel expenses. In Q2 we will be taking a $15 million to $20 million restructuring charge as we continue to take actions to reduce our operating expenses. We expect all of these actions to reduce our original operating expense plan for FY'09 by approximately $50 million and are currently expecting to deliver 15% non-GAAP operating margins for the full fiscal year."
Moses concluded, "We are well positioned to weather this economic storm with $227 million of cash and an additional $156 million available on our revolving credit facility. In addition, we expect to generate more than $100 million in operating cash flow this year which we intend to use to pay down our outstanding debt of $74 million by the end of FY'09 and to buy back our stock. We remain committed to accelerating our organic growth rate and expanding our non-GAAP operating margins into the mid-twenty percent range over the longer-term."
The Q2 guidance assumes a non-GAAP tax rate of 25% and a GAAP tax provision of 30%, which is a benefit on a loss before tax that includes a one-time tax benefit of approximately $7 million. The Q2 non-GAAP guidance excludes approximately $10 million of stock-based compensation expense, $9 million of acquisition-related intangible asset amortization expenses, $15 million to $20 million of restructuring related expense and the related income tax effects.
The FY'09 guidance assumes a non-GAAP tax rate of 25% and a GAAP tax benefit rate of 30%. The FY'09 non-GAAP guidance excludes approximately $46 million of stock-based compensation expense, $35 million of acquisition-related intangible asset amortization expense, $15 million to $20 million of restructuring related expense and the related income tax effects.
Q1 Earnings Conference Call and Webcast
NOTE: Supplemental financial and operating metric information and prepared remarks for the conference call will be posted to the investor relations section of our website simultaneous to the press release after the market closes on Tuesday, January 27. The prepared remarks will not be read live; the call will be primarily Q&A.
When: Wednesday, January 28, 2009 at 8:30 a.m. Eastern Time
Dial-in: 1-888-566-8560 or 1-517-623-4768
Call Leader: Richard Harrison with Passcode: PTC
Replay: The audio replay of this event will be archived for public replay until 4:00 p.m. on February 2, 2009 at 1-866-434-5264 or 1-203-369-1006. To access the replay via webcast, please visit http://www.ptc.com/for/investors.htm.
Important Information About Non-GAAP References
PTC provides non-GAAP supplemental information to its financial results. Non-GAAP operating expenses, margin and EPS exclude stock-based compensation expense, amortization of acquired intangible assets, acquired in-process research and development expenses, restructuring charges, and the related tax effects of the preceding items and any one-time tax items, such as valuation allowance reversals. PTC provides this non-GAAP information to facilitate period-to-period comparisons of its operational performance by adjusting for certain non-cash and certain episodic expenses. We believe that providing non-GAAP measures affords investors a view of our operating results that may be more easily compared to peer companies. PTC management also uses this and other non-GAAP financial information to evaluate, manage and plan our business because the information provides additional insight into ongoing financial performance. In addition, compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. However, non-GAAP information should not be construed as an alternative to GAAP information as the items excluded from the non-GAAP measures often have a material impact on PTC's financial results. Management uses, and investors should use, non-GAAP measures in conjunction with our GAAP results.
Jan 28, 2009
- Tire maker Michelin develops FEA post-processing tools using MeshViz XLM and Open Inventor® by VSG
- FARO and Autodesk Collaborate to Add Support for Point Cloud Data to AutoCAD 2011
- Delcam presented with sixth Queen's Award
- Spatial Announces Registration Open for 3D Insiders' Summit 2011
- MSC Software and Sigmadyne Announce New Capabilities for Optimization of Optical Systems
- Official Thinkdesign 2011 Beta version Entering into the Build Phase - Ready for Imminent Release
- Materialise Innovation Forum Major Success
- COMET robot machining consortium meets at Fraunhofer
- Two Indian SolidWorks resellers add Sescoi's WorkNC to their portfolio
- Autodesk Acquires T-Splines Modeling Technology Assets